Green Room

Snowflakes upon snowflakes

So the ministers got together and pledged 750 billion Euros to keep the Euro from falling. That seems a bit like propping up snowflakes with snowflakes.

Peter Boone and Simon Johnson call this “an alliance of convenience between troubled governments in the south of Europe and the north European banks (and implicitly, north American banks) who enabled their debt habit.” Tyler Cowen points to the implications of large shadow economies, where the shadows are filled by those escaping oppressive taxation.

Exit question: When the EU says it will defend the euro “whatever it takes,” should it be any surprise that speculators will want to test that stand? Haven’t you created a one-way bet?

UPDATE: Oh, wait. It turns out the money that doesn’t come from the IMF has to come through national parliaments. Kevin Drum provides details and asks

I wonder if there are going to be any recalcitrant parliaments out there? And I wonder if any of the dozen or so fights it’s going to take to get approval for this fund will just end up making Europe look even more feckless than it already does? Remember what happened when Congress initially voted against TARP?

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